LEARNING CONTENTS (title of the subsection)

Market Integration
. Market integration is the fusing of many markets into one. Global market integration means that price
differences between countries are eliminated as all markets become one. One way to the progress of
globalization is to look at trends how prices converge or become similar across countries. The time when the
costs of trading across the country fall and that is the time the other firm will take advantage of price differences,
other countries may enter the market of the other country. Trading cost fall when new product invented or
developed becomes cheaper and also, some cost are man-made like when they impose a barriers for trade

In one market a commodity has a single price such as the price of rice would be the same in east
Pangasinan and west Pangasinan if these areas were part of the same market. If the price of rice in west
Pangasinan was higher, sellers of rice would move from the east to the west and prices would equalize. The
price of rice in one place to other might be different, though, and high transport costs and other kinds of
expenses might mean that it would be uneconomical for other sellers to move their stocks to other place if
prices were higher there. And for other markets, the price changes for a long periods of time.

Integration 
By the end of the 20th century globalization across most markets had returned to the levels seen just
before World War I. Today, markets are more integrated than ever as transportation costs have continued to fall
and most tariffs have been scrapped altogether.

One vision of the future of globalization involves the elimination of other kind’s barriers to trade caused
by institutional differences between countries. Markets are embedded in institutions such as property rights,
legal systems, and regulatory regimes. Differences in institutions between countries create trading costs in the
same way that tariffs or distance do. For example, there may be different laws in Kenya, China about what
happens when a buyer fails to pay. This might make it hard for a Chinese exporter to recover what it is owed in
the event of a dispute, which could make the firm reluctant to enter the Kenyan market. Despite the removal of
tariffs the world is far from being a single market. Borders still matter because of these kinds of institutional
incompatibilities. Complete integration requires the ironing out of legal and regulatory differences to create a
single institutional space.

Some economists argue that this process is underway and inevitable, end that global markets drive the
harmonization of institutions across countries. Consider a multinational firm choosing a country in which to
locate its factory. In order to attract the firm’s investment, a government might cut business tax rates and loosen
regulatory requirements. Other competing countries follow suit. The resulting lower tax revenues make
countries less able to finance welfare states and educational programs. All policy decisions become oriented
toward maximizing integration with global markets. No goods or services would be provided that are
incompatible with this.
 LEARNING ACTIVITY 1

Name: _______________________________________ Score: _________________

Course: ______________________________________ Date: __________________

Market Game

The students must bring the following:

Cartolina / Manila paper

Marker
Play money

Direction: The student will be given an exact amount of play money and they will come up with a project/output.

Example:
Amount of Play Money (Php 2,496.00)

Project: Young at Heart (This project is a simple party for the Senior Citizen in Brgy. Cadre)

*please refer to the book entitled “ Worktext in the Contemporary World”, (Mendoza, et.al.)

LEARNING CONTENTS (title of the subsection)

Interstate System
. Interstate System
Most studies of war that take the interstate system as the unit of analysis begin with assumptions from
the ‘realist’ paradigm. States are seen as unitary actors, and their actions are explained in terms of structural
characteristics of the system. The most important feature of the interstate system is that it is anarchic. Unlike
politics within states, relations between states take place in a Hobbesian ‘state of nature.’ Since an anarchic
system is one in which all states constantly face actual or potential threats, their main goal is security. Security
can only be achieved in such a system by maintaining power. In realist theories, the distribution of power in the
interstate system is the main determinant of the frequency of war.

Although all realist theories agree on the importance of power distribution in determining war, they
disagree about which types of power distributions make war more likely. Balance-of-power theories
(Morgenthau 1967) suggest that an equal distribution of power in the system facilitates peace and that unequal
power distributions lead to war. They argue that parity deters all states from aggression and that an unequal
power
distribution will generally result in the strong using force against the weak. When one state begins to gain a
preponderance of power in the system, a coalition of weaker states will form to maintain their security by
blocking the further expansion of the powerful state. The coalitions that formed against Louis XIV, Napoleon
and Hitler seem to fit this pattern.

An interstate system has been emerging in East Asia since the early 1990s. In this system all nations
are now equals. Among the member states, the economic stratification is collapsing rapidly

As to the concept of system, we like to refer to the definition in The Oxford English Dictionary. It defines
‘system’ to be (1) a set or assemblage of things connected, associated, or interdependent, so as to form a
complex unity, or (2) a whole composed of parts in orderly arrangement according to some scheme or plan. In
studies of international politics, the conception of ‘system’ has been used mainly in two ways: international
system, and world system(s). The term ‘international system’ is a concept for analysis or description of
international politics.

Used as an analytical term, it is predicated upon a definite notion of system. But it is not necessarily so
when it is used to describe situations of international relations at a given time. The term ‘international system’
came to be accepted as an academic term in the late 1950s, soon becoming fashionable, but more or less
obsolete in the late 1990s.

When we extrapolate this contrast to international relations, we come across the argument developed
by H.Bull in elaborating on the distinction between international system and society. As to the former, he
defines: A system of states (or international system) is formed when two or more states have sufficient contact
between them, and have sufficient impact on one another’s decisions, to cause them to behave – at least in
some measure – as parts of a whole (Bull 1977: 9-10). This corresponds very well to the first definition of
system noted above. Turning to international society, he defines: A society of states (or international society)
exists when a group of states, conscious of certain common interests and common values, form a society in the
sense that they conceive themselves to be bound by a common set of rules in their relations with one another,
and share in the working of common institutions (Bull 1977: 13). If we borrow Bull’s concepts, international
relations have been rapidly changing from international system to international society in the post-Cold War era.
In the Asian context, an autonomous system of states was formed in the 1990s for the first time in history, and it
has already acquired some elements of international society.

Goldstein's (1988) research suggests that economic expansion tends to increase the severity of great-
power wars bu that economic cycles have no effect on the frequency of war. Theoretical debates about the
systemic causes of war have not been resolved, in part because the results of empirical research have been
inconclusive. Each theory can point to specific cases that seem to fit its predictions, but each must also admit to
many cases that it cannot explain.
 .

LEARNING ACTIVITY 2

Name: _______________________________________ Score: _________________

Course: ______________________________________ Date: __________________

Project Chain: Link to Interconnected individual

Materials:
Sheets of 8 ½ x 11 green construction paper, cut into strips of 1 ½” or 2” wide and 11” long
Markers
Stapler or Glue

A. Give each student a strip of paper and a marker.

B. Write a message on the strip about a quality that makes them unique and proud of who they are as an
individual.
C. Staple (or glue) the individual strips together to make one large chain of connection. If multiple
classrooms are participating, have them link their classroom chains together to create a school-wide
chain.
D. If only one group is participating, find a prominent place to hang the chain that will remind them that
even as individuals we can all come together for something we care about.

SUMMARY

This economic interest also became part of a political strategy that transformed people into individual
political economic subjects. In order to establish, maintain and expand their domination the new states will
make systematic use of scientific knowledge with the aim of assessing and influencing the behavior of their
subjects. And they will do this assuming that people’s behavior is mainly motivated by interest. Government
now consciously wants to deal with the interests of individuals in order to serve its own interest. Political
economics will not only consist of observing people’s self-interested behavior, it will also promote it. The main
issue in the politics of states will be to figure out ways to anticipate what might happen in order to influence
economic expansion. The new politics will not only go together with a reflection about the interest of the state
but also implies that those in power have to think differently about their individual roles in relation to and about
the way their personal motivation fits with the

According to Smith, it was no longer a question of teaching mankind what must be done with reference
to the next world, but rather to understand what the human being actually is and what can be done in this world
with humans as they actually are. The social contract and the workings of society should be studied on the
basis of natural human (Bouchet: Adam Smith: Then & Now)
 Part of the problem is that systemic theories have not incorporated causal factors at lower levels of
analysis, such as internal economic and political characteristics of states. Since the effects of system-level

factors on war are not direct but are always mediated by the internal political economy of states and the
decisions made by individual leaders, complete theories of the causes of war must include these factors as well

REFERENCES